Rolls-Royce: It's Not About the Numbers
Big sales growth doesn't matter to the luxury automaker. Neither do alternative fuels, AWD or anything less than 12 cylinders.
Rolls-Royce sold a record number of cars last year -- a whopping 3,538. Elsewhere in the luxury market, once-niche brands such as Porsche and Bentley have seen corporate boards demand ever more profits and sales; even Ferrari more than doubled Rolls sales last year. Hence, we have SUVs coming from Bentley, Lamborghini and Maserati; all-wheel-drive Ferrari station wagons; Porsche hybrids; and BMW M Series badges on cars that never would have worn them 10 years ago. Every company report I read today talks about increasing sales. Except Rolls-Royce.
For now, Rolls-Royce hasn’t strayed at all from its company lineage. It’s still building, almost entirely by hand, the same regal fortresses it started with 108 years ago. Despite ownership by BMW, Rolls-Royce does it what it wants, when it wants. There are four models to choose from, all get updated at a glacial pace (see the new Phantom Series II), nothing but V12s are offered, and there is zero chance of alternative fuels coming into these luxury bruisers. This is a company that, for decades, used only the word "sufficient" when asked about horsepower.
Could BMW clamp down on the brand and change its old English ways? After catching up with North American President David Archibald, a tall Scotsman quick to dismiss many of my product ideas, I’m convinced it won’t happen for quite some time. Here’s what I learned.
MSN Autos: The Ghost is more of a driver-focused Rolls-Royce. Will we see more models moving in that direction?
David Archibald: There are other potential derivatives [of the Ghost] that could come along. That’s no secret about that. Although people talk about Phantom not being driven as much, that’s actually where people have a misconception. Eighty-five percent of our owners [in the U.S.] will drive their Phantoms.
We would certainly expect to be expanding on that area of the market, in terms of a similar size of what is there with the Ghost.
MSN: Given what Bentley, Lamborghini and other luxury brands are doing, what about a Rolls-Royce SUV?
DA: SUVs are difficult when you think about what you expect in a Rolls-Royce. It’s about effortless driving, it’s the comfort, the magic carpet ride. Getting that balance in an SUV is a challenge. You should never say never, but I wouldn’t say it’s top of the priority list. Everybody else is certainly coming out with SUVs all across the market.
MSN: Bentley says it wants to get back to selling 10,000 cars a year, as it did in 2007, by adding more model lines. Does Rolls-Royce feel the same way, or is the actual number of sales not as important?
DA: We’re all about sustainable growth. What we want there is we want to have growth by bringing in some new product, by refreshing products, but it is not our aim to sell 10,000 cars a year. Our fear, when you look at that, is you could probably sell 10,000 in one year, but you wouldn’t be able to the next year. We want to be at a level where we know what we want to invest in our factory in Goodwood, the new home of Rolls-Royce. So we want to keep the investment levels at a sensible level, and we also want our dealers to do the same. When our friends at Bentley went from 10,000 down, there would have been a hell of a lot of investment on the dealer side, and that was dead air, dead money. We always talk about sustainable growth rather than just growth for growth’s sake.
MSN: The electric 102EX concept didn’t go over so well with customers. Was that expected or did you really think Rolls-Royce owners would like it?
DA: It was expected. The reason we did it – it was a rolling test bed. It was a market research project, because three years ago, if you [said], “What do you think about alternative fuels?” to our customers, there’d be no answer. What it allowed us to do by showing the car is that it allowed us to stimulate the debate. We had 500 formal interviews before, during and after the experience of the car to get their feedback, not just on the idea of electric, but other areas. Where the electric was right was that it was dead in line with what you’d expect from a Phantom. It’s already quiet, and with electric, you cannot hear anything. The other thing that fit it in was the torque.
The downsides where the customers didn’t like it was the eight-hour charging and 125 miles of range. That’s not what they want. And actually, a lot of them did come to the senior executives and said, “Don’t mess with my V12.”
MSN: Were there discussions with customers about start-stop systems, hybrids or diesels?
DA: Again, similar to the SUV, the diesel side of things is a difficult one when you think Rolls-Royce. More than anything, in truth they came back and said, “We love our V12s, don’t mess with it too much.” One of the beauties of being part of the BMW Group is that we can take advantage of the work they are involved in. I was at a breakfast around the Detroit show, and one of the biggest things that we can all work on if you’re looking at fuel economy is the weight of the car. So, carbon fiber, for example, is very expensive, but on a car like a Phantom, on a 7 Series, you can spread the cost a little bit.
MSN: Would Rolls-Royce consider all-wheel drive?
DA: All-wheel drive is a little more difficult. It’s something we’re looking at. To design all-wheel drive into a car you already have is financially not viable. So as we look at refreshing the models, that’s when the opportunities are, so it’s a case we look at. And I know from covering New England, around about Chicago, Toronto, Montreal, those areas we do have requests. And it’s getting the balance of the business case for it. Because more often than not, if it’s heavy snow, people – they’ve got four or five cars – they’ll jump into their Range Rover.
Edited from a longer interview.
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